There is an adage in investing that timing is all you need to be successful. If the world was a simple model without its intrinsic complexity this would be right.
However it is not – and timing is always going to be one of the most difficult risk factors you will have to calculate.
Timing is hard because you have to price in the value of future events on today’s decisions.
I mean how many times did you see a global pandemic being put out in December 2019’s quarterly forecasts?
Which is why we recommend a different perspective when looking at timing.
That is a focus on value.
Value stands the test of time.
And perhaps no object of human value has stood the test of time longer than Gold.
Gold has been found in caves dating back 42,000 years to the Paleolithic period. And we predict it will still be around for many thousands of years into the future.
In this time gold has come to be a trusting store of value for the following reasons:
- Gold is physically scarce. This is because it is difficult to discover and extract. In the 1800s, any location that was heard to have some gold turned into a mining town almost overnight. Today, the rate of gold discovery is about 2,000 tons per year. Unlike new ‘digital gold’ whose scarcity can change at the turn of an algorithm, gold is physically harder to increase or decrease in quantity.
- Material Properties: Gold has amazing material properties. It’s an excellent conductor, for example which is valuable for use in many specialised tools. Furthermore, we are yet to find a metal more malleable and ductile than gold. That means gold can be put into many forms. Gold plated copper wire might sound expensive. Yet only one ounce of gold plate will cover a 1,000 mile long thread of copper.
- Aesthetics: The first reason gold was picked up was for how it looks. Gold looks amazing. It’s been used by rulers and kings as a display of wealth and power since human recorded history.
- A hedge against unexpected change: Gold increases in value normally at times of economic change. These changes cause people to lose faith in currencies and buy more concrete forms of value.
Few other asset classes offer that kind of assured value.
With all that said… is there a “best time” to invest in gold?
Well, there are a few things that can help you make that decision.
To answer this question you would have to look at the macro environment surrounding gold.
One thing you might look at is the expected production of new Gold. As this will help you calculate new supply entering the market and thus price.
Below is the forecast by S&P Market Intelligence.
The second thing you might want to look at is how much money is being printed in the currency you hold currently. As this will help you gauge if other liquid forms of value are being diluted compared to more limited stores of value like gold.
A third thing you might look at is the macro-environment. Is there uncertainty or does the outlook seem steady? When things are uncertain gold has historically done better due to its rise in demand. Keep in mind, blackswans typically happen when nobody is expecting it.
Asking these three questions should give you a better understanding for if now is a good time to invest in gold.
If you have decided that now is a good time to get into gold the next step is the easy part.
We are one of the largest online stores where you can buy a range of investment gold bars and coins.
With a large quantity of gold bullion for both new and seasoned investors. You can choose which product is right for you. You can also choose to have it shipped to you or stored in our safe vault in the City of London.